2
TABLE OF CONTENTS
Identity of Parties and Counsel .................................................................................. 2
Index of Authorities ................................................................................................... 5
Record References ..................................................................................................... 7
Statement of the Case................................................................................................. 8
Statement Regarding Oral Argument ........................................................................ 9
Issues Presented ....................................................................................................... 10
Issue One: The trial court erred in vacating rather than confirming
the arbitration award.
Statement of Facts .................................................................................................... 11
I. The City breached two construction contracts that it had with IOC
and those breaches resulted in disputes and IOC incurring damages.
..................................................................................................................... 11
II. IOC and the City sought to resolve their disputes through binding
arbitration. After hearing significant evidence, the arbitrator found
that the City breached the contracts and awarded IOC damages................ 12
III. Unhappy with the arbitration’s outcome, the City sought to vacate
the arbitration award. Faced with meritless grounds for vacating the
award, the trial court nonetheless granted the City’s request to
vacate the award and denied IOC’s request to confirm the award. ............ 14
Summary of Argument ............................................................................................ 15
Argument.................................................................................................................. 17
I. The Court may presume that the arbitration award is governed by
both the Texas and federal arbitration acts. The Court must review
the trial court’s decision to vacate the award de novo and can only
consider grounds for vacating that were raised at the trial level. An
arbitrator’s mistakes of law and fact are an insufficient basis for
vacating an award........................................................................................ 17
II. The City gave the trial court three reasons for vacating the
arbitration award: (1) the award violated public policy; (2) the award
was obtained by undue means in violation of the TAA; and (3) the
arbitrator exceeded his powers in violation of the TAA. Because

3
these reasons lacked merit, the trial court erred in vacating rather
than confirming the award. ......................................................................... 19
A. The arbitration award cannot be vacated on the City’s common-
law ground because the TAA’s and FAA’s statutory grounds
for vacating an award are exclusive. ................................................... 19
B. In a misguided attempt to prove to the trial court that the
arbitration award was obtained by undue means, the City
sought to show that the award stemmed from the arbitrator’s
mistakes of law and fact. The mistakes alleged, however, are
incapable of establishing that the arbitration award was
obtained by undue means. Moreover, the City’s failure to
present the trial court with a complete record of the arbitration
proceedings precluded the trial court from recognizing any of
the alleged mistakes............................................................................. 21
C. In a misguided attempt to prove to the trial court that the
arbitrator exceeded the scope of his powers, the City sought to
show that the arbitrator committed mistakes of law and fact.
The mistakes alleged, however, are incapable of establishing
that the arbitrator exceeded his powers. Moreover, the City’s
failure to present the trial court with a complete record of the
arbitration proceedings precluded the trial court from
recognizing any of the alleged mistakes. ............................................ 24
D. The trial court was compelled to confirm the arbitration award
and erred when it failed to do so. ........................................................ 28
Prayer ....................................................................................................................... 29
Certificate of Compliance ........................................................................................ 30
Certificate of Service ............................................................................................... 30
Appendix .................................................................................................................. 31

11
in the form of additional compensation for the owner-caused delays that

increased IOC’s cost to perform the work for the Projects. 3CR:118. In

response, the City argued (1) that it did not breach the Agreements; (2) that

the Agreements barred IOC from seeking additional compensation; and

(3) that any delays IOC suffered were caused by third parties over whom the

City had no control or responsibility. 3CR:118.

II. IOC and the City sought to resolve their disputes through binding
arbitration. After hearing significant evidence, the arbitrator
found that the City breached the contracts and awarded IOC
damages.

In accordance with the Agreements’ arbitration clauses, IOC and the

City sought to have their disputes resolved through arbitration.

1CR:55,59,62; 3CR:200,290. The arbitrator, William K. Andrews, held an

evidentiary hearing on claims and disputes relating to the Canton Road

Project on February 17 and 18, 2014. 3CR:660. The arbitrator held an

evidentiary hearing on claims and disputes relating to the Sugar Road Project

receiving post-hearing briefing, the arbitrator issued his “Final Award of

Arbitrator (Reasoned)” on July 18, 2014 (“the Award”). 3CR:117-24. In the

Award, the arbitrator articulated, in small part, the following:

12
Based on the evidence presented to me, the Canton Road
Agreement and the law of the State of Texas, I find the City
materially breached this Agreement without excuse and is liable
to IOC for damages in the form of additional compensation
arising from City-caused delays, disruptions and interferences.
I further find IOC did not materially breach the Agreement. . . .
The evidence concerning IOC’s efforts to perform the
scope of work for the Canton Road Project and the numerous,
serious and costly City-caused delays, interferences and
disruptions it suffered in those efforts is compelling and
supports my finding the City materially breached the
Agreement.
....
IOC faired [sic] no better on the Sugar Road Project in
terms of the delays, interferences and disruptions it suffered at
the hands of the City. Once again, the evidence the Sugar Road
Agreement and the law of the State of Texas compel me to find
the City materially breached the Sugar Road Agreement
without excuse and is liable to IOC for damages in the form of
additional compensation arising from City-caused delays. IOC
did not materially breach the Agreement. . . .
The evidence of IOC’s efforts to perform the scope of the
work for the Sugar Road Project and the numerous, serious and
costly City caused delays, interferences and disruptions it
suffered in those efforts is similarly compelling and supports
my finding the City materially breached the Sugar Road
Agreement.

3CR:118-21. The Award articulated numerous factual findings and legal

conclusions on which the arbitrator relied to justify his decision in IOC’s

in damages and $158,000 in attorney fees in connection with the Canton

Road Project; $673,092 in damages and $127,827 in attorney fees in

13
connection with the Sugar Road Project; and $25,905.74 as reimbursement

for IOC’s arbitration fees and expenses. 3CR:123.

III. Unhappy with the arbitration’s outcome, the City sought to vacate
the arbitration award. Faced with meritless grounds for vacating
the award, the trial court nonetheless granted the City’s request
to vacate the award and denied IOC’s request to confirm the
award.

On August 14, 2014, the City filed an original petition in the 332nd

Hidalgo County District Court that sought to vacate the Award. 1CR:12. In

its amended petition, the City advanced three reasons for why the Award

should be vacated: (1) the award was obtained by undue means; (2) the

arbitrator exceeded his powers, thus authorizing vacatur under the Texas

from the Texas Arbitration Act, which permits a court to vacate an arbitration

award when (1) it is obtained by undue means and (2) the arbitrator exceeds

his powers. The City made passing reference to these statutory grounds to

the trial court, but the City made no actual attempt to show:

 that the Award stemmed from the arbitrator purposely engaging in

immoral, illegal, or bad-faith conduct directed at the City (i.e.,

undue means); or

 that the arbitrator decided matters that were outside the scope of

what was arbitrable (i.e., exceeded his powers).

The City’s passing references to these statutory grounds were nothing more

than cheap camouflage—intended to obscure the reality that the City was

simply seeking to vacate the Award based on the arbitrator’s purported

mistakes of law and fact. In light of the countless legal authorities

15
recognizing that mistakes of law and fact are an insufficient basis for

vacating an arbitration award, the trial court could not have properly vacated

the Award in response to the City’s statutory grounds for vacatur. But even

if the City’s proffered mistakes of law and fact were capable of satisfying

the statutory grounds the City referenced, the City’s failure to present a

complete record of the proceedings before the arbitrator precludes any court

from recognizing any mistake. Both the trial court and this Court must

presume that the missing portions of the record support the Award and the

legal conclusions and factual findings contained therein.

The trial court was thus provided with no meritorious basis for

vacating the Award. As a result, the trial court was compelled to confirm the

Award. IOC thus asks the Court to issue an opinion that reverses the trial

court’s order vacating the Award and renders judgement confirming the

Award.

16
ARGUMENT

I. The Court may presume that the arbitration award is governed
by both the Texas and federal arbitration acts. The Court must
review the trial court’s decision to vacate the award de novo and
can only consider grounds for vacating that were raised at the
trial level. An arbitrator’s mistakes of law and fact are an
insufficient basis for vacating an award.

The trial court, on the other hand, must review an arbitrator’s
award with great deference. Because arbitration awards are
favored by the courts as a means of disposing of disputes, the
courts indulge every reasonable presumption in favor of
upholding the awards. A mere mistake of law or fact is
insufficient to set aside an arbitration award.
Id. at *3-4. “It is abundantly clear that a party seeking to vacate an arbitration

award must present any grounds for doing so to the trial court, otherwise,

18
II. The City gave the trial court three reasons for vacating the
arbitration award: (1) the award violated public policy; (2) the
award was obtained by undue means in violation of the TAA; and
(3) the arbitrator exceeded his powers in violation of the TAA.1
Because these reasons lacked merit, the trial court erred in
vacating rather than confirming the award.

A. The arbitration award cannot be vacated on the City’s
common-law ground because the TAA’s and FAA’s
statutory grounds for vacating an award are exclusive.

Three months after the trial court vacated the Award, the Texas

Supreme Court issued its opinion in Hoskins v. Hoskins, wherein the

supreme court sought “to resolve a split in the courts of appeals on whether

the TAA permits vacatur of an arbitration award on common-law grounds

not enumerated in the statute.” No. 15-0046, 2016 Tex. LEXIS 386, at *8

(Tex. May 20, 2016). The supreme court held that the TAA did not permit

vacatur of an arbitration award on common-law grounds not enumerated in

the statute, explaining:

The statutory text could not be plainer: the trial court
“shall confirm” an award unless vacatur is required under one
of the enumerated grounds in section 171.088. As the court of
appeals correctly determined, the TAA leaves no room for
courts to expand on those grounds, which do not include an
arbitrator's manifest disregard of the law.
....

1
The City’s amended petition vaguely references CPRC § 171.091 as a basis for vacating
the Award, but that section must summarily be disregarded since it only sets forth grounds
for modifying or correcting an award—not vacating an award in its entirety, which is all
the City prayed for in its amended petition. See TEX. CIV. PRAC. & REM. CODE § 171.091.

19
In sum, the TAA mandates that, unless a statutory vacatur
ground is offered, the court shall confirm the award. Thus, a
party may avoid confirmation only by demonstrating a ground
expressly listed in section 171.088. [The appellant] complains
that “the TAA contains gaps that need common-law
supplementation” in order to foreclose arbitration awards that
are “unquestionably” improper. But we may not rewrite or
supplement a statute to overcome its perceived deficiencies.
The parties signed an agreement to arbitrate under the TAA, and
that agreement contained no limitations on the arbitrator’s
authority beyond those enumerated in the statute. Because
manifest disregard is not an enumerated vacatur ground under
section 171.088, the court of appeals correctly declined to
consider it in affirming the trial court’s confirmation order.

Id. at *11-15 (citations and brackets omitted). In accordance with Hoskins,

the Court must find that the TAA does not permit the trial court to vacate the

Award based on the City’s contention that the Award “violates public policy

pursuant to Texas Common Law.” SR:17; 2CR:84-102. The Court should

similarly find that the FAA does not permit the trial court to vacate the

Award based on its purported violation of public policy. See, e.g., Parallel

B. In a misguided attempt to prove to the trial court that the
arbitration award was obtained by undue means, the City
sought to show that the award stemmed from the
arbitrator’s mistakes of law and fact. The mistakes alleged,
however, are incapable of establishing that the arbitration
award was obtained by undue means. Moreover, the City’s
failure to present the trial court with a complete record of
the arbitration proceedings precluded the trial court from
recognizing any of the alleged mistakes.

The City argued that the Award could be vacated pursuant to

subsection 171.088(a)(1) of the TAA, which states that “[o]n the application

of a party, the court shall vacate an award if . . . the award was obtained by

corruption, fraud, or other undue means.” TEX. CIV. PRAC. & REM. CODE

§171.088(a)(1) (emphasis added). “Whether under the Texas or federal

standard, ‘undue means’ connotes behavior that is immoral, illegal, or

otherwise in bad faith. The term describes conduct that is purposeful and

Because the Federal Arbitration Act uses almost identical
language to Section 171.088(a)(1), it is helpful to look to cases
considering the issue under the FAA. A mere mistake of law is
insufficient to vacate an arbitration award on the basis of ‘undue
means.’ Instead, a party who seeks to vacate an award allegedly
procured by ‘undue means’ must show immoral, illegal, or bad-
faith conduct.

In the instant case, the City provided the trial court with transcripts of

the arbitration proceedings, but failed to provide the roughly 354 evidentiary

exhibits that the arbitrator considered in issuing the Award.2 3CR:660-

770,772-853. The City’s failure to provide the trial court with a complete

record thus necessitates a determination that the Award was not obtained by

undue means—especially since the City has improperly predicated the

“undue means” finding on the trial court’s ability to conclude, through an

2
The 354 exhibits consisted of 193 exhibits presented in connection with the proceedings
on the Canton Road Project and 161 exhibits presented in connection with the
proceedings on the Sugar Road Project. The 193 exhibits relating to the Canton Road
Project entailed 44 joint exhibits, 51 exhibits from IOC, and 98 exhibits from the City.
3CR:660-63 (listing exhibits). The 161 exhibits relating to the Sugar Road Project
entailed 34 joint exhibits, 77 exhibits from IOC, and 50 exhibits from the City.
3CR:772-75 (listing exhibits). These exhibits were not presented to the trial court.

23
incomplete record, that the arbitrator made mistakes of law and fact. See

Gessee v. U.S. Home Corp., No. 02-02-00405-CV, 2003 Tex. App. LEXIS

4575, at *2 (Tex. App.—Fort Worth May 29, 2003, no pet.) (mem. op.)

(holding that there was no other choice but to reject appellant’s argument

that arbitration award was obtained by undue means when appellant failed

to furnish a complete record of arbitration proceedings); see also

Commonwealth Assoc. v. Letsos, 40 F. Supp. 2d 170, 172-75 (S.D.N.Y.

1999) (where party argued that arbitration award should be vacated because

arbitrator acted in manifest disregard of law, the trial court recognized that

the party’s failure to present the trial court with exhibits presented to

[c]ourt was unable to exclude the possibility that the award is supported by

evidence that [the party] has not placed before [the court]”).

C. In a misguided attempt to prove to the trial court that the
arbitrator exceeded the scope of his powers, the City sought
to show that the arbitrator committed mistakes of law and
fact. The mistakes alleged, however, are incapable of
establishing that the arbitrator exceeded his powers.
Moreover, the City’s failure to present the trial court with
a complete record of the arbitration proceedings precluded
the trial court from recognizing any of the alleged mistakes.

CPRC § 171.008(a)(3)(A) states that on the application of a party, a

court shall vacate an award if the arbitrator exceeded his powers. TEX. CIV.

PRAC. & REM. CODE §171.008(a)(3)(A).

24
An arbitrator exceeds his powers when he decides matters not
properly before him. In determining whether an arbitrator has
exceeded his power, [courts] examine the language in the
arbitration agreement, and any doubts concerning the scope of
what is arbitrable must be resolved in favor of arbitration. The
authority of an arbitrator is derived from the arbitration
agreement and is limited to a decision of the matters submitted
therein either expressly or by necessary implication. It is only
when the arbitrator departs from the agreement and, in effect,
dispenses his own idea of justice that the award may be
unenforceable.

to vacate the award against it while arguing in part that “the arbitrator

exceeded his power in awarding damages for breach of contract.” Id. In

rejecting this argument, the Dallas COA provided the following analysis:

. . . BBL argued that the arbitrator exceeded his powers
by “disregarding the contract and creating a new agreement

25
between the parties.” BBL argued to the trial court that the
arbitrator based the damages award on an hourly rate of $28.50
for Elite’s employees and that the parties had never agreed to
that hourly rate. BBL argued that the contract called for
maximum payments and the arbitrator ignored those maximums
agreed upon by the parties and created a new agreement based
on this hourly rate.
Elite argued that the issue in an exceeded-his-powers
claim “is not whether the arbitrator decided an issue . . .
correctly, but instead, whether [the arbitrator] has the authority
to decide the issue at all.” Elite argued that the arbitration
agreement gave the arbitrator authority to decide the breach of
contract claim. We agree.
An arbitrator derives his authority from the arbitration
agreement. An arbitrator exceeds his authority when he decides
a matter not properly before him. We presume an arbitrator’s
actions were within his authority and we resolve all doubts in
favor of the award.
In this case, the parties agreed to arbitrate “any
controversy or claim arising out of or related to this
AGREEMENT, or the breach thereof.” This is broad language
covering any dispute between BBL and Elite arising out of their
contract. BBL did not dispute that the breach of contract claim
was properly before the arbitrator. Instead, it contended that the
arbitrator calculated damages based on an hourly rate not
agreed to by the parties and, as a result, “departed from the
parties’ agreement and dispensed his ‘own idea of justice.’”
But the arbitration agreement in this case did not place
restrictions on the arbitrator’s authority to decide the amount of
damages for the breach of contract claim. The arbitration
agreement gave the arbitrator full authority to resolve the
contract dispute. Although the arbitrator resolved the dispute in
a way that BBL believes was wrong, this “does not mean the
arbitrator acted outside the scope of his authority.” The breach
of contract claim was properly before the arbitrator. BBL’s
argument that the arbitrator erroneously determined damages
for a claim properly before him is an allegation of a mistake of
fact or law and is not a ground for vacating an arbitration award.

26
Id. at *7-10 (citations, brackets, and ellipses omitted).

The Canton Road Agreement’s arbitration clause read, in pertinent

part, as follows: “Any controversy or claim arising of or relating to this

contract, or the breach thereof which cannot be resolved by mutual

agreement, shall be settled by arbitration[.]” 1CR:55 (emphasis added). The

Sugar Road Agreement’s arbitration clause—which proceeds a mediation

clause that requires non-binding mediation of “any claims, demands, or

disputes”—reads in part as follows: “If the parties fail to resolve any dispute

by mediation, the parties shall submit the dispute to [an arbitrator].” 1CR:59

Pursuant to Texas Rule of Appellate Procedure 9.4, I hereby certify that this
brief contains 4,415 words. This is a computer-generated document created in
Microsoft Word 2013, using 14-point typeface for all text, except for footnotes
which are in 12-point typeface. In making this certificate of compliance, I am relying
on the word count provided by the software used to prepare the document.

/s/ Ricardo Pumarejo Jr.
Ricardo Pumarejo Jr.

CERTIFICATE OF SERVICE

I hereby certify that on July 11, 2016, a true and correct copy of this document
was served upon the following persons via electronic filing service.

1. Order Denying IOC Company, LLC’s Petition and Motion to Confirm
Arbitrator’s Award and for Entry of Final Judgment
2. Order Granting Amended Petition/Application to Vacate Arbitration Award
3. Final Award of Arbitrator (Reasoned)
4. The City’s Amended Petition/Application to Vacate Arbitration Award
5. The City’s Brief in Support of Vacating Arbitration Award

I, THE UNDERSIGNED ARBITRATOR, having been designated in accordance
with the arbitration agreement entered into between the above-named parties, and
having been duly sworn, and having duly heard the proofs and allegations of the
P arties, hereby AWARD as follows:

Introdnction

The parties to this proceeding are IOC Company, LLC ("IOC''), a highway and road
contractor, and City of Edinburg, Texas ("City"), a municipality. IOC and the City
agreed to my appointment as the arbitrator in this proceeding ancl made no objections to
my continued service as arbitrator after I made disclosures.

The claims and disputes the pru'ties are arbitrating, arise out of two projects but
involve similar facts, agreements and scopes of work. In addition, the witnesses
testifying about the claims and disputes arising out of both projects were identical.
Previously, the parties agreed to consolidate these claims and disputes and present
them to me for resolution.

I conducted bifurcated hearings with respect to each project. I neard the claims
and disputes arising out of the Canton Road Project first at the evidentiary hearing
devoted to that project held on February 17 and 18, 2014 which, by consent of the
parties, was held open until the establishment of the post hearing submission sch edule
set forth in the Order Regarding Post Hearing Briefing Schedule. Next, I heard the
claims and disputes arising out of the Sugar Road Project at the evidentiary hearing
held on April 16 and 17, 2014. The hearings were declared closed on June 18, 2014.

The post hearing briefing schedule 1·equired the submission of briefs and closing
statements, replies and attorneys' fees affidavits for both projects.

In accordance with t he post heru·ing submission schedule as set forth in the above

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C-6852-14-F

described Order and discussions memorialized in the hearing tt•anscript, I am now
rendering this Final Award with respect to the claims and disputes arising out of both
projects.

The Cla.ims, Defenses and Dz:sputes: Canton Road Project

IOC and the City enter ed into an agreement dated Ap1'il 1, 2008 under which IOC
agreed to perform paving, d1·ainage improvements and expansion of a portion of Canton
Road for tbe City in accordance with the plans, specifications and information the City
furnished to roc.

IOC seeks recovery of damages in the form of additional compensation due to the
City's claimed breach of contract, essentially consisting of delays, jnterferences and
disruptions it alleges the City caused it to suffet·. IOC also seeks recovery of attorneys'
fees, prejudgment interest and reimbursement of arbitratm• compensation and costs.

The City contests IOO's legal entitlement to recovery of damages and argues TOG's
claims are barred or excluded by the parties' agreement and § 271.153, Local
Government Code. The City stl'Ongly denies it was responsible for owner-caused delays
that increased IOC's cost to perform the work for this project. In particular, the City
argues the City was not responsible for relocating utilit-y lines, encumbrances and
obstructions that hindered, delayed or disrupted IOC's ability to timely, efficiently and
in a linear, logical and sequential manner pel'foi'm the required scope of work in
accordance with its construction plan. The City further argues any delays IOC suffered
were caused by thi1·d parties over whom :it had no coniJ.·ol or I'esponsibility.

The Clairns, DefenseJJ and Disputes: Sttgar Road Project

Similarly, IOC and the City entered into an agreement dated June 2, 2009 under
which IOC agreed to perform paving, drainage improvements and expansion and
widening of a portion of Sugar Road for the City in accordance with the plans,
specifications and information tbe City furnished to IOC.

Essentially, IOC's claim and the types of damages it seeks minor those described
fo1· the Canton Road Project. The same generally holds true for the Cicy's defenses
although the City emphasizes several pt·ovisions in the Canton Road Agreement which
it asse~ts preclude IOC's claim and damages.

Findings Regarding the Oa.nton Road Project

Based on the evidence presented to me, the Canton Road Agreement and the law of
the State of Texas, I find the City materially breached this Agreement without excuse
and is liable to roc for damages in the form of additional compensation al·ising from
2

65
C-6852-14-F

City-caused delays, disruptions and interferences. I further find IOC did not materially
breach the Agreement. I discuss the facts and 1·easons in support of these findings
below.

The evidence concerning IOC's efforts to perform the scope of work for the Canton
Road Project and the numerous, serious and costly City-caused delays, interferences
and disruptions it suffered in those efforts is compelling and suppo1•ts my :finding the
City materially breached the Agreement.

This evide11ce established the following facts and supports the following reasons
for my ente1·ing an award in IOC's favor on its claim arising out of the Canton Road
Px·oject:

1. The City failed to timely and properly provide IOC with the lands necessary
for it to perform the scope of work under the Canton Road Agreement.

2. The City failed to provide IOC timely and proper access to the areas in
which it was to perform the scope of work under the Canton Road
Agreement.

3. The City failed to provide IOC with tmhindered and unobstructed access to
the areas in which it was to perform the scope of work m1de1· the Canton
Road Agreement.

4. The City failed to timely, reasonably and propel'ly manage the removal of
obstacles, conflicts and obstructions in the areas in which roc was to
perform the scope of work under the Canton Road Agreement. The City had
the duty and responsibility to manage the removal of these in the areas in
which roc was to perform the scope of work.

5. The City's preceding failures delayed IOC's ability to timely and efficiently
perform the scope of work under the Canton Road Agreement.

6. The City is responsible for owner-caused delays to IOC's ability to timely
and efficiently perf01·m the scope of work under the Canton Road
Agl'eement.

7. The City's preceding failures disrupted and interfered with IOC's ability to
timely and efficiently perform the scope of wo1·k under the Canton Road
Agreement.

8, The number and quality of the utility lines (underground and above
ground), power poles, splicing operations. gas lines and meters and

3

66
C-6852-14-F

manholes which singularly and cumulatively delayed and disrupted IO C's
work pet•formance are significant and compelling. These are City-caused
delays, disruptions and interferences.

9. The City also f:ailed to timely acquire permits and easements from the local
dnlinagc and irrigation districts which also delayed and disrupted IOC's
wo1·k performance. These, too, are City-caused delays. disruptions and
interferences.

10. As a result of the City-caused delays and the City's material breach of the
Agreement, IOC suffered increased costs in the amount of $1,362l630 to
perform the scope of work under the Canton Road Agreement. These costs
consist of labor costs in the sum of $480,682, equipment costs in the sum of
$475,639, material escalation costs in the sum of $2001 075, extended field
costs in the sum of $28,500 and mark-up of $177,734.

11. The City is liable to IOC for the increased costs totaling $1,362,630 (set
forth in the preceding subparag1·aph) as additional compensation.

12. The City is also liable to IOC for IOC's reasonable attorneys' fees in the sum
of $158,000.

13. § 271.153, Local Government Code, does not ba:r IOC's claim for additional
compensation arising out of the Canton Road Project.

14. Special Provision 18 of the Canton Road Agreement is not applicable to the
claim asse1'ted by IOC; IOC did not b1'each o1· violate this provision.
Therefore, Special Provision 18 does not bar or preclude ICC's claim.

15. IOC did not waive its claim fo1· damages·.

16. Because the City materially breached the Agreement, it cannot rely on
procedural rights, including notice provisions, in the Agreement. Indeed, by
its breach, th e City relinquished its contractual procedw·al rights Iegarding
notice, change orders and claims by roc for additional compensation.

17. By its failures and conduct as described above, tbe City wrongfully
prevented 10C from timely and efficiently peTforming its WOrk.

18. IOC's further performance under the Agreement was excused by the City's
prior material breaches.

19. The City's material breaches a1·e not excused based on the failUI·e of any

4

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C-6852-14-F

third party to remove or relocate their lines or utilities that constitute
obstacles, conflicts and obstructions as described above.

20. The delays IOC experienced were City-caused and compensable to IOC.

Findings Regarding the Sugar Road Project

IOC's fared no better on the Sugar Road Project in terms of the delays,
interferences and disruptions it suffered at the hands of the City. Once again, the
evidence, the Sugar Road Agl'eement and the law of the State of Texas compel me to find
the City materially breached the Sugar Road Agreement without excuse and is liable to
IOC for damages in the form of additional compensation arising from City-caused delays.
IOC did not materially breach the Agreement. As before, I discuss the facts and 1·easons
in suppm·t of these findings below.

The evidence of IOC's efforts to perform the scope of work for the Sugar Road
Project and the numerous, serious and costly City caused delays, interferences and
disruptions it suffered in those efforts is similarly compelling and supports my finding
the City materially breached the Sugar Road Agreement.

Again,. this evidence supports the following facts and reasons for my entering an
award in rOC's favor on its claim arising out of the Sugar Road Project:

1. The City failed to timely and properly provide roc with the lands necessary
for it to perform the scope ofworkunderthe Suga1· Road Agreement.

2. The City failed to provide IOC timely and proper access to the. areas in
which it was to perfurm the scope of work under the SugaT Road Agreement.

3. The City failed to provide roc with unhindered and unobstructed access to
the areas in which it was to perform the scope of work under the Sugar Road
Agreement.

4. The City failed to timely, reasonably and Pl'Operly manage the removal of
obstacles, conflicts and obstructions in the areas in which roc was to
perform the scope of work under the Sugar Road Agreement. The City had
the duty and responsibility to manage the removal of these in the areas in
which roc was to perform the scope of work.

5. The City's preceding failures delayed IOC's ability to timely and efficiently
perform the scope of work under the Sugar RoadAgreement.

6. The City is responsible for owner-caused delays to lOC's ability to timely

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and efficiently perfo1'm the scope ofwork under the SugaT Road Agreement.

7. The City's preceding failures disrupted and interfered with IOC's ability to
timely and efficiently pel'form the scope of work under the Sugar Road
Agreement.

8. The number and quality of the gas lines, manholes, utility poles, and
subgrade access p roblems delayed and disrupted IOC's work performance
are significant and compelling. In addition, the City stopped IOC's
performance of work in one area south of Owassa Street which further
delayed and disrupted IOC's work. These are City-caused delays,
disruptions and interferences.

9. As a result of the City-caused delays and the City's material breach of the
Sugru· Road. Agreement, IOC suffered increased costs in the amount of
$673,092 to perform the scope of work under the Sugru· Road Agreement.
These costs consist of labor costs in the sum of $219,191, equipment costs in
the sum of $290,944, material costs in the sum of $60,163, extended field
costs in the sum of $15,000 and mark-up in the sum of $87,794.

10. The City is liable to IOC for the increased costs set forth in the preceding
subparagraph in the sum of $673,093 (as set forth in the preceding
subparagraph) as additional compensation, none of which is barred by §
271.153, Local Government Code.

11. The City is also liable to IOC for IOC's reasonable attorneys' fees in the sum
of $127,827.

12. § 271.153, Local Government Code, does not ba1· IOC's claim for additional
compensation asserted by IOC against the City arising out of the Sugal'
Road Project nor does it bru· the damages I am awarding IOC in the amount
of $673,093.

13. roc did not waive its claim for damages.
14. Because the City materially breached the Sugar Road Agreement, it cannot
rely on procedural rights, including notice provisions, in this agreement.
Indeed, by its b1·each, the City relinquished its contractual procedural rights
rega1·ding notice, change orders and claims by 100 for additional
compensation.

15. By its failures and conduct as described above, the City wrongfully
prevented roc from timely and efficiently performing the scope of work

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under the Sugar Road Agreement.

16. IOC's further pel'formance under the Agreement was excused by the City's
p1·ior material breaches.

17. The City's mateTial breaches are not excused based on the failure of any
third party to remove or relocate their lines or utilities that constitute
obstacles, conflicts and obstructions as described above.

18. Art. 12.l(D) of the Sugar Road Agreement does not bar 10C's claims or
damages. Neither Special P1·ovision 18 or 20 preclude IOC"s claims or
damages.

19. Art. 14.8A of the Sugar Road Agt·eement does not bar IOC's claim or
damages.

20. The delays IOC experienced were City-caused and compensable to IOC.

Award

1. Fo1· the Canton Road Project:

a. The City shall pay 100 the sum of $1,362,630, the components
of which are set forth in finding number 10 under the Findings
Regarding t he Canton Road Project set forth above; and

b. The City shall pay IOC reasonable attorneys' fees of $1581000.

2. For the Sugar Road Project:

a. The City shall pay IOC the sum of $$673,092, the components
of which are set forth in finding number 9 under the Findings
Regarding the Sugar Road Project set forth above; ; and

b. The City shall pay IOC reasonable attorneys' fees of $127,827.

3. The administrative fees and expenses of the American Arbit1·ation
Association totaling $11,450 shall be borne by the City and the
compensation and expenses of the arbitrator totaling $28,911.48 ·s hall
be borne by the City. Therefor·e, the City shall reimburse IOC the
sum of $25,905.74, representing that po1·tion of said fees and expenses
in excess of the apportioned costs previously incurred by IOC.

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The above sums are to be paid on or before 30 days from the date of this Award.

:::t:•::y :::·:~·not expressly gra::;· il
This Award is in full settlement of all claims and counterclaims submitted to this

I hereby certify that a true and correct copy of the above and foregoing document has
been forwarded as a courtesy copy to attorney for Defe.ndant via electronic mail, on this 13u,
day of January, 2015.

Is/Gerald E. Castillo
Gerald E. Castillo

f:\data\WPOOCS\C\CIN OF EOINOURG\IOC v. COE\brlef In support of vacatlng award<l 22914.sm.wpd